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INFORMATION ON BUSINESS SEGMENTS
 9 Months Ended
Sep. 24, 2023
Segment Reporting [Abstract]  
INFORMATION ON BUSINESS SEGMENTS INFORMATION ON BUSINESS SEGMENTS
Overview
We operate in four business segments: Aeronautics, Missiles and Fire Control (MFC), Rotary and Mission Systems (RMS) and Space. We organize our business segments based on the nature of products and services offered.
Selected Financial Data by Business Segment
Net sales and operating profit of our business segments exclude intersegment sales, cost of sales and profit as these activities are eliminated in consolidation and thus are not included in management’s evaluation of performance of each segment. Business segment operating profit includes our share of earnings or losses from equity method investees as the operating activities of the equity method investees are closely aligned with the operations of our business segments.
Summary Operating Results
As discussed in “Note 1 - Basis of Presentation”, effective January 1, 2023, we no longer consider amortization expense related to purchased intangible assets when evaluating the operating performance of our business segments. As a result, intangible asset amortization expense, which was previously included in segment operating profit, is now reported in unallocated items within total consolidated operating profit.
This change has been applied to the amounts below, including the amounts for 2022. Sales and operating profit for each of our business segments were as follows (in millions):
 Quarters EndedNine Months Ended
September 24,
2023		September 25,
2022		September 24,
2023		September 25,
2022
Net sales
Aeronautics$6,717 $7,089 $19,861 $19,352 
Missiles and Fire Control2,939 2,831 8,082 8,030 
Rotary and Mission Systems4,121 3,781 11,528 11,345 
Space 3,101 2,882 9,226 8,266 
Total net sales$16,878 $16,583 $48,697 $46,993 
Operating profit
Aeronautics$671 $759 $2,064 $2,051 
Missiles and Fire Control398 383 1,146 1,186 
Rotary and Mission Systems 482 472 1,286 1,339 
Space 259 304 851 823 
Total business segment operating profit1,810 1,918 5,347 5,399 
Unallocated items
FAS/CAS pension operating adjustment414 430 1,245 1,281 
Intangible asset amortization expense(61)(62)(185)(186)
Other, net (121)(127)(193)(439)
Total unallocated items232 241 867 656 
Total consolidated operating profit$2,042 $2,159 $6,214 $6,055 
Intersegment sales
Aeronautics$62 $63 $186 $181 
Missiles and Fire Control177 146 482 463 
Rotary and Mission Systems518 503 1,512 1,411 
Space 97 102 275 284 
Total intersegment sales$854 $814 $2,455 $2,339 
Unallocated Items
Business segment operating profit excludes the FAS/CAS pension operating adjustment, a portion of corporate costs not considered allowable or allocable to contracts with the U.S. Government under the applicable U.S. Government cost accounting standards (CAS) or federal acquisition regulations (FAR), and other items not considered part of management’s evaluation of segment operating performance such as a portion of management and administration costs, legal fees and settlements, environmental costs, stock-based compensation expense, changes in the fair value of assets and liabilities for deferred compensation plans, retiree benefits, significant severance charges, significant asset impairments, gains or losses from divestitures, intangible asset amortization expense, and other miscellaneous corporate activities. Excluded items are included in the reconciling item “Unallocated items” between operating profit from our business segments and our consolidated operating profit. See “Note 10 - Other” for a discussion related to certain factors that may impact the comparability of net sales and operating profit of our business segments.
FAS/CAS Pension Operating Adjustment
Our business segments’ results of operations include pension expense only as calculated under U.S. Government Cost Accounting Standards (CAS), which we refer to as CAS pension cost. We recover CAS pension and other postretirement benefit plan cost through the pricing of our products and services on U.S. Government contracts and, therefore, recognize CAS pension cost in each of our business segment’s net sales and cost of sales. Our consolidated financial statements must present pension and other postretirement benefit plan income calculated in accordance with Financial Accounting Standards (FAS) requirements under U.S. GAAP. The operating portion of the total FAS/CAS pension adjustment represents the difference between the service cost component of FAS pension income (expense) and total CAS pension cost. The non-service FAS pension income (expense) components are included in non-service FAS pension income (expense) in our consolidated statements of earnings. As a result, to the extent that CAS pension cost exceeds the service cost component of FAS pension income (expense) we have a favorable FAS/CAS pension operating adjustment.
Disaggregation of Net Sales
Net sales by products and services, contract type, customer, and geographic region were as follows (in millions):
Quarter Ended September 24, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$5,538 $2,609 $3,249 $2,618 $14,014 
Services1,179 330 872 483 2,864 
Total net sales$6,717 $2,939 $4,121 $3,101 $16,878 
Net sales by contract type
Fixed-price$4,495 $2,017 $2,602 $796 $9,910 
Cost-reimbursable2,222 922 1,519 2,305 6,968 
Total net sales$6,717 $2,939 $4,121 $3,101 $16,878 
Net sales by customer
U.S. Government$4,547 $2,061 $2,796 $3,055 $12,459 
International (a)
2,170 875 1,254 24 4,323 
U.S. commercial and other— 3 71 22 96 
Total net sales$6,717 $2,939 $4,121 $3,101 $16,878 
Net sales by geographic region
United States$4,547 $2,064 $2,867 $3,077 $12,555 
Europe1,190 197 269 1 1,657 
Asia Pacific693 155 601 22 1,471 
Middle East220 474 185 1 880 
Other67 49 199 — 315 
Total net sales$6,717 $2,939 $4,121 $3,101 $16,878 
Nine Months Ended September 24, 2023
AeronauticsMFCRMSSpace Total
Net sales
Products$16,339 $7,110 $9,082 $7,767 $40,298 
Services3,522 972 2,446 1,459 8,399 
Total net sales$19,861 $8,082 $11,528 $9,226 $48,697 
Net sales by contract type
Fixed-price$13,463 $5,498 $7,261 $2,359 $28,581 
Cost-reimbursable6,398 2,584 4,267 6,867 20,116 
Total net sales$19,861 $8,082 $11,528 $9,226 $48,697 
Net sales by customer
U.S. Government$13,285 $5,553 $7,973 $9,084 $35,895 
International (a)
6,453 2,521 3,349 110 12,433 
U.S. commercial and other123 8 206 32 369 
Total net sales$19,861 $8,082 $11,528 $9,226 $48,697 
Net sales by geographic region
United States$13,408 $5,561 $8,179 $9,116 $36,264 
Europe3,466 582 706 48 4,802 
Asia Pacific2,058 472 1,593 60 4,183 
Middle East671 1,340 526 2 2,539 
Other258 127 524 — 909 
Total net sales$19,861 $8,082 $11,528 $9,226 $48,697 
Quarter Ended September 25, 2022
AeronauticsMFCRMSSpace Total
Net sales
Products$6,072 $2,530 $2,968 $2,441 $14,011 
Services1,017 301 813 441 2,572 
Total net sales$7,089 $2,831 $3,781 $2,882 $16,583 
Net sales by contract type
Fixed-price$5,217 $2,005 $2,436 $722 $10,380 
Cost-reimbursable1,872 826 1,345 2,160 6,203 
Total net sales$7,089 $2,831 $3,781 $2,882 $16,583 
Net sales by customer
U.S. Government$4,728 $2,086 $2,721 $2,842 $12,377 
International (a)
2,326 744 1,002 34 4,106 
U.S. commercial and other35 1 58 6 100 
Total net sales$7,089 $2,831 $3,781 $2,882 $16,583 
Net sales by geographic region
United States$4,763 $2,087 $2,779 $2,848 $12,477 
Europe1,184 228 199 21 1,632 
Asia Pacific785 100 440 10 1,335 
Middle East255 374 181 3 813 
Other102 42 182 — 326 
Total net sales$7,089 $2,831 $3,781 $2,882 $16,583 
Nine Months Ended September 25, 2022
AeronauticsMFCRMSSpace Total
Net sales
Products$16,293 $7,147 $8,906 $6,920 $39,266 
Services3,059 883 2,439 1,346 7,727 
Total net sales$19,352 $8,030 $11,345 $8,266 $46,993 
Net sales by contract type
Fixed-price$13,819 $5,661 $7,243 $2,112 $28,835 
Cost-reimbursable5,533 2,369 4,102 6,154 18,158 
Total net sales$19,352 $8,030 $11,345 $8,266 $46,993 
Net sales by customer
U.S. Government$12,904 $5,605 $8,017 $8,144 $34,670 
International (a)
6,344 2,419 3,102 97 11,962 
U.S. commercial and other104 6 226 25 361 
Total net sales$19,352 $8,030 $11,345 $8,266 $46,993 
Net sales by geographic region
United States$13,008 $5,611 $8,243 $8,169 $35,031 
Europe3,052 746 564 65 4,427 
Asia Pacific2,211 313 1,425 23 3,972 
Middle East739 1,256 558 9 2,562 
Other342 104 555 — 1,001 
Total net sales$19,352 $8,030 $11,345 $8,266 $46,993 
(a)International sales include foreign military sales (FMS) contracted through the U.S. Government and direct commercial sales to international governments and other international customers.
Our Aeronautics business segment includes our largest program, the F-35 Lightning II, an international multi-role, multi-variant, stealth fighter aircraft. Net sales for the F-35 program represented approximately 26% of our total consolidated net sales for both the quarter and nine months ended September 24, 2023 and 29% and 27% of our total consolidated net sales for the quarter and nine months ended September 25, 2022.
Assets
Total assets for each of our business segments were as follows (in millions):
September 24,
2023		December 31,
2022
Assets
Aeronautics$13,252 $12,055 
Missiles and Fire Control5,706 5,788 
Rotary and Mission Systems17,822 17,988 
Space 6,522 6,351 
Total business segment assets43,302 42,182 
Corporate assets (a)
13,364 10,698 
Total assets$56,666 $52,880 
(a)Corporate assets primarily include cash and cash equivalents, deferred income taxes, assets for the portion of environmental costs that are probable of future recovery, property, plant and equipment used in our corporate operations, assets held in a trust for deferred compensation plans, and other marketable investments.